☆ INTRO: Friends do you know how to manage your money in a proper way? How to double or multiply the money with good investment? Money is big matter nowadays. If you try to enrich your bank balance then you should know about basic mony management.
Today we are trying to provide you basic money investment principle with our Top 10 Best Principle Of Investment 2020. There are so many principle about investment bt we are provided you Top 10 Best Principle Of Investment 2020. So let's begain...
☆ TOP 10 BEST PRINCIPLE OF INVESTMENT 2020
10. INVESTMENT COST: Investment costs matter all costs matter even that 1% fee could often go unnoticed. many people don't pay attention to the small fees they're charged as they should see a small 1% fee may not mean much but, when you do the math you'll be completely surprised.
Just how much you could potentially lose let's say you're shopping around for a fund manager and you find see great choices one charges. your 1.5 percent annual management fees and the other charge is 0.5% it doesn't seem like a big difference does it right now it may not look like much.
but over time that small fee could result in you potentially losing thousands of dollars in the years to come it's believed that fun companies that charge more in fees have more money for research and the perception is they do a better job however research indicates otherwise investors who minimize all their costs do better overall.
9: MARGIN OF SAFETY: have a margin of safety price and value for your money will always matter when it comes to investing. one of the best principles of the art is to have a margin of safety by this, I mean purchase assets for less than their real value.
Basically buy them cheap sometimes assets will be priced lower than their intrinsic values. especially during a recession period acquiring an asset at a low price or at below market price is a great deal for an investor. because the return on investment is almost guaranteed plus it for some reason he needs to get rid of the asset quickly.
then the margin of safety will protect the investor we all know circumstances can easily change in the financial markets financial markets are sensitive to multiple factors see what happened with coronavirus within no time markets are plummeting all over the world.
8. ASSET ALLOCATION: asset allocation is key the way an investor divides their portfolio. among different asset categories is key to ensuring returns on their investment this is where many investors fail as they put very little thought into their asset allocation strategies by investing solely in overvalued assets.
you were bound to experience lower long-term returns the key is to always evaluate all categories underweight the expensive categories and overweight those that are bargain priced.
7: LONG-TERM MINDSET: have a long-term mindset sure you can make a couple bucks. through speculative moves in the financial markets, but most of the time you'll burn a lot of money trying to chase the next big wave. the true essence and beauty of trading is buying an asset at a favorable price and waiting for it to appreciate in value.
this may take a while though as Warren Buffett says long-term investing is one of the most important investing principles. as short-term trading will only lead to lower returns or losses. in the long run don't let fewer greed take over your decision-making process and let time do its thing.
6: POWER OF COMPOUND: if you're looking for exponential growth then you better take some time to understand compounding. take the time to understand how it works and how you can use it to double up your returns. one of the most exciting aspects of compounding is the multiplying effect.
it has on your money over time instead of, constantly withdrawing dividends leave the money there and watch just how much more you'll be able to make as much as, compounding may be great. it can also be detrimental reverse compounding can be devastating, for example a 10% loss may only require an 11% gain to return to normalcy but a 50% loss may require a 100% gain to get back to break-even yikes.
5:RISK MANAGEMENT: nothing worthwhile in life comes without its fair share of risks and investing is no exception to minimize risk.
investors employee risk management strategies volatility and once portfolio is one of the leading killers that can wipe away your money in a flash. it's a serious problem one that investors are constantly trying to maneuver around especially in bear markets.
for those who don't know bear markets are the markets where share prices are falling which encourages selling so by managing the risk you will ensure you don't lose your money.
4: VOLATILITY: need to run from portfolio volatility. but embrace market volatility with open arms it is easy to control portfolio volatility. but impossible to control that of the financial markets. however with market volatility comes great opportunities.
be ready to take advantage of them at the right time be cognizant of the overvalued assets and also be flexible enough to move your money once the conditions are not favorable.
3: CONTROL YOUR DESTINY: you should be in charge of your money because no one will care about your finances. as much as you do conflicts of interest fraud and absurd fees, make self investing a very attractive option.
luckily today technology and the Internet has helped in bringing down fees and all other transaction costs. it also provides all the needed information to make the right investment choices. there has never been a better time in history than now where you can be a self-directed investor with very minimal effort.
instead of focusing on getting a fund manager or a financial expert see what you can do by yourself you will be surprised at how much you can save in fees and transaction costs.
2: DONT TAKE IT PERSONAL: just like everything in life you'll lose and win the thing with investing is. you could either end up making minimal profits make a ton of money or lose it all markets determine the return rates and they could either favor you or not favor you.
ensure you don't take any failure to heart and be strong-willed to continuously invest your money never give up.
1: CONTINIOUSLY LEARN AND RESEARCH: there's a lot of information on the internet. use this info to learn new trends identify, new opportunities and channels of investing your money.
most of the resources are free and some have a small fee. continuously watch business news to understand what is happening and you will soon become an expert investor all by your own accord.
Comments
Post a Comment
Send your doubt we are ready to solve it